June 17, 2024

Brad Marolf

Business & Finance Wonders

Planned Amazon layoffs could hamper e-commerce, logistics

Twitter, Meta and now Amazon are engaging in mass layoffs as the tech industry contends with a massive downturn.

According to a Monday report in The New York Times, the e-commerce giant is planning the largest layoff in company history, cutting around 10,000 jobs. The cuts, people familiar with the matter told the Times, will mainly focus on the company’s devices organization, which houses the company’s struggling Alexa business.

But sources said that Amazon (NASDAQ: AMZN) is also planning major cuts to its retail division, which is responsible for online shopping, physical retail and a chunk of the firm’s logistics operations. Hourly workers, who make up the bulk of the company’s workforce, will not be impacted.

Amazon did not immediately respond to Modern Shipper’s request for comment.

The layoffs were not necessarily unexpected for Amazon, which has ceased hiring in several segments since September. That includes a freeze on more than 10,000 open roles in the retail business as well as a monthslong freeze on corporate hiring.

The marketplace has also repeatedly scaled back its logistics operations in recent months, delaying or closing more than 60 warehouses and scrapping services like free Whole Foods delivery and its Scout home delivery robot as it contends with slowing e-commerce growth.

Watch: Amazon pulling back air cargo

What is surprising, though, is that the planned layoffs would come right as peak season kicks off.

Typically, companies like Amazon ramp up seasonal hiring to meet the increased demand that comes with the holidays. But between April and September, the Times reports, Amazon lost about 80,000 people primarily to attrition. (Turnover rates in the company’s warehouses routinely top 100%.)

That’s not unusual for Amazon, at least in recent years, and the company said it plans to bring on the same number of seasonal workers this year as it did last year.

Still, the fact that all of this is happening shortly before the holiday season is a not-so-subtle signal that Amazon and newly minted CEO Andy Jassy are firmly in cost-cutting mode as the company attempts to rebound from a disappointing third quarter.

Click for more Modern Shipper articles by Jack Daleo.

You may also like:

Amazon unveils smaller, lighter, more durable delivery drone

Target reimagines store design for e-commerce, same-day services

Amazon, Rivian rolling out EVs in more cities ahead of holidays